GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New DelhiJuly, 2016
G.S.R................. (E).- In exercise ofthe powers conferred by sub-sections (1) and(2) ofsection 469
and section 148 of the Companies Act, 2013 (1.8 of 201.3) (hereinafter referred as the Act), the Central
Government hereby makes the following rules further to amend the Companies (cost records and
audit) Rules, 2014, namely:-
1. (1) These rules may be called the Companies (cost records and audit) Amendment Rules, 2016.
(2) They shall come into force on the date of their publication in the official Gazette.
2. In the Companies (cost records and audit) Rules, 2O14 (hereinafter referred to as the Principal
R ules).-
(i) in rule 2, for clause (d), the following clause shall be substituted, namely:-
"(d) "cost audit report" means the duly signed cost auditor's report on the cost records
examined and cost statements which are prepared as per these rules, including attachment,
annexure, qualifications or observations attached with or included in such report;"
(ii) in rule 3, for Table (A) and Table (B), the following Tables shall be substituted, namely:-
,.TABLE
(A) Regulated Sectors
sl. lndustry/ Sector/ Product/ Service Central Excise
No. Tariff Act
Heading
(wherever
applicable)
1. Telecommunication services made available to users by means Not applicable.
of any transmission or reception of signs, signals, writing, images
and sounds or intelligence of any nature and regulated by the
Telecom Regulatory Authority of India under the Telecom
Regulatory Authority of India Act, 7997 (24 of 1997); including
activities that requires authorisation or license issued by the
Department of Telecommunications, Government of India under
Indian Telegraph Act, 1885 (13 of 1885);
2. Generation, transmission, distribution and supply of electricity Generation-
regulated by the relevant regulatory body or authority under the 27t6;
Electricity Act, 2003 (36 of 2003); Other Activity-
Not Applicable
Petroleum products; including activities regulated by the 2709 ro 27L5;
Petroleum and Natural Gas Regulatory Board under the
Petroleum and Natural Gas Regulatory Board Act,2006 (19 of Other Activity-
2006); Not Applicable
Drugs and pharmaceuticals; 29OL to 2942;
3001to 3006.
Fertilisers; 3102 to 3105.
6. Sugar and industrial alcohol; L70'J.; 7703;
2207 .
{8) Non-regulated Sectors
5t. Industry/ sector/ Product/ Service Central Excise Tariff Act
No. Heading (wherever
a pplica ble)
1. Machinery and mechanical appliances used in 8401; 8801 to 8805;8901 to
defence, space and atomic energy sectors excluding 8908.
any ancillary item or items;
Explanation. - Forthe purposes ofthis sub-clause, any
company which is engaged in any item or items
supplied exclusively for use under this clause, shall be
deemed to be covered under these rules
2. Turbo iets and turbo propellers; 8417
3. Arms, ammunitions and ExPlosives; 3601 to 3603;9301 to 9306.
4. Propellant powders; prepared explosives (other than 3601 to 3603
propellant powders); safety fuses; detonating fuses;
percussion or detonating caps; igniters; electric
detonators;
Radar apparatus, radio navigational aid apparatus 8526
and radio remote control apparatus;
6. Tanks and other armoured fighting vehicles, 8710
motorised, whether or not fitted with weapons and
parts of such vehicles, that are funded (investment
made in the company) to the extent of ninety per cent
or more bv the Government or Government agencies;
7. Port services of stevedoring, pilotage, hauling, Not applicable.
mooring, re-mooring, hooking, measuring, loading
and unloading services rendered by a Port in relation
to a vessel or goods regulated by the Tariff Authority
for Maior Ports;
8. Aeronautical services of air traffic management, Not applicable
aircraft operations, ground safety services, ground
handling, cargo facilities and supplying fuel rendered
by airports and regulated by the Airports Economic
Regulatory Authority under the Airports Economic
Regulatgry Authority of India Act,2OO8 (27 of 2OO8);
9. lron and Steel; 72Ol to 7 229;7 3O7 to 7326
10. Roads and other infrastructure proiects Not applicable.
corresponding to para No. (1) (a) as specified in
Schedule Vl ol the Companies Act, 2013 (18 of 2013);
11. Rubber and allied products; including products 4OOl to 4077
regulated by the Rubber Board constituted under the
Rubber Act, 1.947 (XX|V of 1947);
72. Coffee and tea; 0901 to 0902
13. Railway or tramway locomotives, rolling stock, 8601 to 8608.
railway or tramway fixtures and fittings, mechanical
(including electro mechanical) traffic signalling
equipment's of all kind;
L4, 2523; 6811 to 5812
15. Ores and Mineral products; 2502 to 2522; 2524 to 2526;
252a 6 2530;26Q1. to 26!7
Mineral fuels (other than petroleum), mineral oils 2707 to 2708
77. Base metals; 7 40, to 7 4O3; 7 4OS to 7 473;
74L9;7507 to 7508; 7601 to
7674; 78Ql to 7802; 1804;
78O6t 7901,to 7905; 79Ol;
8001; 8003; 8007; 8101 to
8113.
18. Inorganic chemicals, organic or inorganic compounds 2801 to 2853; 2901. to 2942;
of precious metals, rare-earth metals of radioactive 3801 to 3807; 3402 to 3403;
elements or isotopes, and organic chemicals; 3809 to 3824.
19. Jute and Jute Products; 5303, 5310
20. Edible Oil; 1507 to 1518
27. Construction Industry as per para No. (5) (a) as Not applicable.
specified in Schedule Vt of the Companies Act, 2013
(18 of 2013);
Health services, namely functioning as or running Not applicable.
hospitals, diagnostic centres, clinical centres or test
laboratories;
23. Education services, other than such similar services Not applicable.
falling under philanthropy or as part of social spend
which do not form part of any business;
24. Milk powder; o402
25. Insecticides; 3808
26. Plastics and polymers; 3901 to 3914; 3916 to 3921;
3925
27. Tyres and tubes; 4011 to 4013
24. Paper; 4801 to 4802.
29. Textiles; 5004 to 5007; 5106 to 5113;
52OS to 521,2; 5303; 5310;
5401 to 5408;5501 to 5516
30. Glass; 7003 to 7008j 7017;7076
31. Other machinery and Mechanical Appliances; 8402 to 8487
32. Electricals or electronic machinery; 8501 to 8507:8511 to 8512:
8514 to 8515; 8517; 8525 to
8536: 8538 to 8547.
55. Production, import and supply or trading of following 9018 to 9022
medical devices, namely:-
(i) Cardiac stents;
(ii) Drug eluting stents;
(iii) Catheters;
(iv) Intra ocular lenses;
(v) Bone cements;
(vi) Heart valves;
(vii) Orthopaedic implants;
(viii) Internal prosthetic replacements;
(ix) Scalp vein set;
(x) Deep brain stimulator;
(xi) Ventricular peripheral shud;
(xii) Spinal implants;
(xiii) Automatic impalpable cardiac deflobillator;
(xiv) Pacemaker (temporary and permanent);
(xv) Patent ductus arteriosus, atrial septal defect and
ventricular septal defect closure device;
(xvi) Cardiac re-synchronise therapy ;
(xvii) Urethra spinicture devices;
(xviii) Sling male or female;
(xix) Prostate occlusion device; and
(xx) Urethral stents:
(iii) in rule 4, in sub-rule (3), after clause (ii), following clause shall be inserted, namely:-
"(iii) which is engaged in generation of electricity for captive consumption through Captive
Generating PIant. For this purpose, the term "Captive Generating Plant" shall have the same
meaning as assigned in rule 3 of the Electricity Rules, 2005";
(iv) in rule 6, in sub-rule (1), the following proviso shall be inserted, namely:
-
"Provided that before such appointment is made, the written consent of the cost auditor to
such appointment, and a certificate from him or it, as provided in sub-rule (1.A), shall be
obtained";
(v) ln rule 6, after sub-rule (1), the following sub-rule shall be inserted, namely:-
"(1A) The cost auditor appointed under sub-rule (1) shall submit a certificate that-
(a) the individual or the firm, as the case may be, is eligible for appointment and is
not disqualified for appointment under the Act, the Cost and Works Accountants Act,
1959 (23 of 1959) and the rules or regulations made thereunder;
(b) the individual or the firm, as the case may be, satisfies the criteria provided in
section 141 of the Act, so far as may be applicable;
(c) the proposed appointment is within the limits laid down by or under the authority
of the Act; and
(d) the list of proceedings against the cost auditor or audit firm or any partner of the
audit firm pending with respect to professional matters of conduct, as disclosed in
the certificate, is true and correct.";
(vi) in rule 6, in sub-rule (3), the following provisos shall be inserted, namely:
-
"Provided that the cost auditor appointed under these rules may be removed from his office
before the expiry of his term, through a board resolution after giving a reasonable opportunity
of being heard to the Cost Auditor and recording the reasons for such removal in writing;
Provided further that the Form CRA-2 to be filed with the Central Government for intimating
appointment of another cost auditor shall enclose the relevant Board Resolution to the effect:
Provided also that nothing contained in this sub-rule shall prejudice the right of the cost
auditor to resign from such office of the company.";
(vii) in rule 6, after sub-rule (3A), following sub-rule shall be inserted, namely:-
138) The cost statements, including other statements to be annexed to the cost audit
report, shall be approved by the Board of Directors before they are signed on behalf of the
Board by any of the director authorised by the Board, for submission to the cost auditor to
report thereon";
(viii) in rule 6, for sub-rule (5), the following sub-rule shall be substituted, namely:-
"(5) Every cost auditor shall forward his duly signed report to the Board of Directors of the
company within a period of one hundred and eighty days from the closure of the financial
year to which the report relates and the Board of Directors shall consider and examine such
report, particularly any reservation or qualification contained therein.";
(ix) in rule 6, for sub-rule (6), the following sub-rule shall be substituted, namely:-
"(6) Every company covered under these rules shall, within a period of thirty days from the
date of receipt of a copy of the cost audit report, furnish the Central Government with such
report alongwith full information and explanation on every reservation or qualification
contained therein, in Form CRA-4 in Extensible Business Reporting Language format in the
manner as specified in the Companies (Filing of Documents and Forms in Extensible Business
Reporting language) Rules, 2015 alongwith fees specified in the Companies (Registration
Offices and Fees) Rules, 2014.".
lFile No. 1/40/2013-Ct-Vl
'*ffo{'"ta
(Amardeep Singh Bhitia)
Joint Secretary to the Government of India
Note.- The principal rules were published in the Gazette of India, Extraordinary, Part ll, Section 3, Sub-
section (i), vrde number G.S.R. 425 (E), dated the 3oth June, 2Ol4 and amended v,de number G.S.R.
01(E), dated the 31" December, 2Ot4 and vide number G.S.R. 486 (E), Dated the 12th June, 2015.